misrepresentation Flashcards
what is misrepresentation
false statement of fact by which representer induces represented to enter the contract
- makes the contract voidable
is a puffery a misrep actionable
no - cannot be verified objectively
- gimmick v wallet
can statements of opinion be actionable
not normally actionable. as long as they appear to be nothing more than an opinion-
- bisset v wilkinson
exception
- an apparent statement of opinion or belief can imply that the person making the statement has a factual basis for that opinion or belief.
- boundary between fact and opinion may depend Jon balance of knowledge between parties eg an expert
- smith v land and house property
can statements of future intention be actionable
generally not because it is not an existing fact.
- intrepreneur Pub v Sweeney
if the statement was fraudulent, then the representer has made a misrep to their state of mind which is an existing fact and therefore actionable
is failure to reveal facts a misrepresentation
general rule- no obligation to reveal facts- Keats v Earl of Cadogan
what happens if a statement becomes false between the time it was negotiated and made.
must give notice of a change in statement or it might result in an actionable misrep.-
- With v O’Flanagan
what are the exceptions to the general rule on. failure to reveal facts
- conduct- Spice girls v Aprilia world service - conduct can indicate certain impression which if it is failure is a misrep.
- defects being deliberatly hidden.- Schneider v Heath.
- half true statments- dimmock v hallett
what is the difference between a half true statement and a changed circumstance situ
both true when made, half true is concealed facts and changed situ becomes untrue
what special contacts require a duty to reveal info
- insurance contracts
- fiduciary relationships (solicitor and client)
what is the requirement of inducement for a false representation to be actionable
the representer must have been induced.
1. statement does not have to be the only reason for entering the contract
2. fraudulent misrep- must have been ‘materially influenced’ by the statement
3. non-fraudulent misrep- but for test
if a statement isn’t believed to be true, is it capable of being an inducement.
Hayward v Zurich insurance company.
- it might be possible,
if the statement is verified by an expert or a 3rd party, inducement is far less likely
- even if they are given the opportunity to verify but doesn’t take it, statement can still be inducement
what is the effect of a misrep
it makes the contract voidable, continues in effect until the representer elects to affirm or rescind the contract.
what is rescission
the basic remedy following an actionable breach. - means restoring the pre-contract position, putting parties back to where they would have been if he contract had not been entered into to.
how can a contract be rescinded
- innocent party must communicate an intention to rescind.- give notice
what are the bars to rescission.
- affirmation- when the innocent party shows intention to carry on
- lapse of time- the innocent party takes too long to rescind
- impossibility of restitution- not possible to restore the parties to their original position
- supervening third party rights - when the rights of an innocent 3rd party prevent rescission
long v Lloyd
authority of affirmation being a bar to rescission
what is the rule for lapse of time
- fraud misrep- time at which the fraud is discovered. lapse of time can evidence them affirming contract
- negligent misrep- time at which misrep Is discovered
- innocent misrep- time at which the contract comes into effect
if the bars to rescission do apply, is this final
no the courts might find power to refuse it.
misrepresentation act 1967.
what is a fraudulent misrepresentation and the damages available
TORT OF DECEIT
DERRY V PEEK
- where there has been a false representation made, knowingly, recklessly or carelessly whether it be true or false.
damages available
-Doyle v Olby
- all direct loss irrespective of foreseeability
- contributory negligence reduction doesn’t not apply
what is the negligence and what damages are available
TORT OF NEGLIGENCE
reliance loss based on the contract not having bee made.
- reasonably foreseeable loss
- contributory negligence does apply
what is innocent misrep and what damages are available?
expectation measure- as if the statement had been true
- likely to Best wishes reasonably foreseeable loss.
contributory negligence reduction does apply
what is the contributory negligence reduction
what is s.2(1) of the misrep act 1967 and what damages are available
the act introduced its own version of negligent misrep that applies between parties that have a contract
- liable for damages if the representor cannot disprove negligence by showing he or she had reasonable grounds for making the statement
- based on the contract not having been made
- all direct loss irrespective of forseeability
- contributory negligence does apply
